Finra Narrows the Scope of its Suitability Rule

1/15/2013 10:13AM

Brokers may be breathing a little easier. Wall Street's self-regulator has scaled back its interpretation of who counts as a customer, alleviating broker concerns about being held liable for recommendations made in pitches to prospects.

This transcript has been automatically generated and may not be 100% accurate.

... the rarer the room ... I was worried it back to his inability will can bring a little bit easier ... this is the beest Caitlin is ... sick and impress on my sweats in ability ... so certainly isn't a ... piece and the broker had ... to make sure that every recommended securities transaction or ... investment strategy is suitable for the client base ... clients investment ... I'm so what if in a say about this this summer ... so this summer and a beefed up its suitability rule ... on it added to the lives of customer information better broker must generally tried eclectic in Alliance before making a recommendation ... and also conforms brokers liable for corporate committee said ... it isn't the explicitly tell a customer data to stick with existing investment ... on what had brokers a look here and once there is broad interpretation of ... who counts as a customer you face an informal relationships accounts ... and tidy can cover recommendations made to the potential and after a ... while ... so that that's a pretty broad umbrella when that this December they ... updated the selection yet so in December that production additional guidance on on the wall ... I didn't speak a scaled back the possible circumstances in which the suitability obligations that the trigger ... on any cited that potential investor ... might actually become a customer ... in order to to trigger the ruling and the brokers obligation ... interesting ... so the Phillies brokers that a lot of responsibility to that system counter protest in it so they have to worry about on ... ever Mindy Sandy to someone who doesn't act on and where to execute that transaction away from their firm or on their own ... on the brokers ... don't have to be very concerned about stability in general ... on and stability is one of the most common claims brought an arbitration and ... it is something that brokers have to really focus ... that said thank you so much in the gym ...